How can pathology practices keep managed care companies from dictating their payment terms? Mick Raich describes how a basic scenario might play out and how it can be steered to pathologists' advantage.

"Say a large national plan comes in and announces:
We're going to cut your reimbursement from 140 percent of Medicare to
60 percent of Medicare. The group calls back and says, 'No, we can't do
it,' but the payer says 'Tough.' Typically a lot of groups will say okay.
They don't like it, but they'll just take the pay cuts."

"Most hospital groups have a Part A contract
with a typical managed care clause, saying the group must make efforts
to sign with the plans the hospital participates in, and the payers know
that," Raich points out.

What he does is bring the hospital into the equation.
"I will sit with the CEO of the hospital and say: We're taking an X percent
pay cut and it's going to cost us $40,000 a year. Now give us the leverage
to negotiate that contract, which means we have to have the option to
terminate that contract."

"The hospital can then say to the payer: That
pay cut you're proposing is coming out of my pocket. So the bad guy here
is more the managed care plan. The hospital has a fixed budget and can't
get more money." While it doesn't work all the time, Raich says this strategy
has helped to create the leverage a practice needs to negotiate.

Some pathology practices may have to take the leap
and terminate contracts and become non-participating, as most emergency
room physicians already do. "I think to be non-participating is a good
thing from the revenue side, but not from the patient's point of view.
It's a win-win scenario when you can renegotiate and get paid more."